Last week we made the case for generating passive income through option writing. A quick recap of last week: buying puts to secure the downside of your equity investment is a bit like casino gambling: pay a wager (put option premium) for the prospect of winning a big prize (unlimited equity upside potential). Unfortunately, the average expected returns are also quite poor, just like when you gamble in the casino or buy lottery tickets.
Since we can’t beat the casino, let’s be the casino!
Being the casino means we act as the seller of put options. Let’s see how we implement this: Continue reading “Passive income through option writing: Part 2”